Market Entry Strategies: Licensing, Franchising & Joint Ventures
Market Entry Strategies: Licensing, Franchising, and Joint Ventures
31) For Starbucks and other companies whose business models are based on franchising, which of the following is the best way to enter a new market? D) Exporting
32) One of the advantages of licensing is: B) Licensees have considerable autonomy.
33) Licensing as a market entry mode has several disadvantages, except: E) Adaptations by the licensee.
34) ________ represents a market entry strategy whereby one company permits a foreign company to make use of its patents, know-how, technology, company name, or other intangible assets in return for a royalty payment: C) Licensing
35) In order to prevent a licensor-competitor from gaining unilateral benefit, the licensing agreement should provide for: C) Cross-licensing.
36) Companies that use “contract manufacturing” do not show: E) Considerable commitment of management resources.
37) Pollo Campero, a chicken restaurant chain based in Central America, successfully expanded into the US by using: D) Franchising.
38) Would-be franchisors ask all of the following questions except: D) Can products be easily duplicated?
39) The specialty retailing industry, as well as the fast-food industry, favors ________ for global growth: C) Franchising
40) The agreements that allow McDonald’s franchisees around the globe to use McDonald’s trademarks and business methods are known as: B) Franchising
41) McDonald’s success in franchising in global markets can be attributed to several factors, except: D) Cross-licensing.
42) Honda has invested $550 million in building an assembly plant in Greensburg, Indiana; this is an example of: D) FDI (Foreign Direct Investment).
Disadvantages and Advantages of Joint Ventures
43) The disadvantages of joint venturing include all of the following (except): B) Joint ventures allow partners to achieve synergy.
44) Joint ventures allow partners to share risk and combine complementary strengths. However, the following strategy is not a reason to opt for a joint venture: C) Reward sharing.
45) Which of the following does not fit into the sequence of experiences Anheuser-Busch had in Japan? D) Anheuser-Busch entered into an equity joint venture with Kirin.
46) As a general rule, the Chinese government allows foreign companies to participate in its market only if those companies agree to establish operations with local Chinese enterprises. Which market entry mode would be the appropriate choice under these circumstances? C) Joint venture
47) The president of a Mexican company recently remarked, “Business in Mexico is done on a consensus basis, very genteel and sometimes slow by US standards.” A few months later, the Mexican company and its US joint venture partner parted company. Judging by the president’s remark, the most likely cause of the “divorce” was: B) Cultural differences.
48) Toyota learned many things from its partnership with GM, except: D) Toyota did not apply what it learned from GM to its operations outside the US.
49) GM executives are looking for a joint venture with AvtoVAZ, a Russian automaker, because the company is: C) Russia.
50) In a joint venture with Russian manufacturer AvtoVAZ, GM executives were mindful of the fact that the Lada was designed to withstand brutal driving conditions. However, the vehicle was perceived by Russians as: B) It sported a very low sticker price.
51) The Russian market for imported premium vehicles is exploding. The luxury models of which of the following brands are assembled in the Kaliningrad region? B) Lexus.
52) Ford Motor Company (United States) has a 50-50 joint venture to build Ford Fiestas and other cars with: D) Mahindra & Mahindra (India).
53) Which automaker currently has a joint venture with Hindustan Motors (India)? C) GM
54) Ford and Mazda have collaborated for years in market entry and expansion. This is an example of a: A) Joint venture.
55) Which of the following currently owns a 70% stake in Skoda, the Czech automaker? B) Volkswagen
56) Which automaker owns an equity stake in Japan’s Nissan Motor? E) Renault
57) Tata Motors (India) acquired the following auto company: C) Jaguar (UK).
58) Avon Products uses ________ to enter developing markets: E) Acquisition and joint ventures
Characteristics of Global Strategic Alliances
59) The competitive business environment is now characterized by all of the following except: D) Inadaptability.
60) Which of the following is not a characteristic of global strategic alliances? E) Participants agree not to compete in areas unrelated to the alliance.
61) Which of the following is not a characteristic of global strategic alliances? D) Participants focus on an individual country market.
62) The terminology used to describe the new forms of cooperation strategies varies widely and the phrases used include all of the following except: E) Greenfield Operation.
63) GSPs (Global Strategic Partnerships) are attractive for several reasons except: E) Focus on a single national market or a specific problem.
64) Which of the following does not fit in with the factors that should be considered for the success of GSPs (Global Strategic Partnerships)? E) None of the above
65) Having partners from another country can offer advantages, which include all of the following except: E) Increased competition.
66) An attribute that does not represent a true global strategic partnership is: C) The relationship is organized along vertical lines.
67) “Corporate amnesia” in global partnership is a term that refers to: B) Short-term goals with no memory of what has been done in the past.
68) “Discussion and consensus must be the norms. Partners must be viewed as equals.” When applied to global strategic partnerships, this statement indicates the importance of which factor? C) Governance
69) “Successful GSPs create win-win situations, where participants pursue objectives on the basis of mutual advantage.” When applied to global strategic partnerships, this statement indicates the importance of which factor? A) Mission
70) According to a 1991 report by McKinsey & Co., a large number of global strategic partnerships were not reaching their full potential. The main cause for this was: A) Objective levels of performance.
71) The success of CFM International (the strategic partnership between GE and Snecma) can be attributed to which of the following? E) All of the above
72) Boeing developed the wide-bodied aircraft, the 777, with about ________ of the work subcontracted to Mitsubishi, Fuji, and Kawasaki: C) 20%
73) A number of factors combine to make Russia a challenging market, except: C) Abundance of supplies.
Understanding *Keiretsu*
74) Which of the following is not true of Japanese *keiretsu*? C) Ensures low prices for Japanese consumers.
75) Which of the following is true about Japanese *keiretsu*? A) Toyota is a vertical *keiretsu*; Mitsui is a horizontal *keiretsu*.
76) Which of the following statements most accurately describes the extent to which GM and Toyota outsource components? C) GM outsources about 50% of its components; Toyota outsources about 75%.
77) Another perspective on the future of cooperative strategies envisions the emergence of: B) Virtual corporations.
78) Saab markets two luxury car models, both prized by drivers for their “quirkiness.” About 70% of Saab’s sales come from outside its home country. Which of the following strategies does Saab appear to be using? A) Country concentration/market segment concentration